London open: Stocks rise as investors mull retail sales

London stocks rose in early trade on Friday as investors mulled an improvement in consumer confidence but a bigger-than-expected drop in retail sales.

At 0830 GMT, the FTSE 100 was up 0.7% at 8,207.09

Data released earlier by the Office for National Statistics showed that retail sales fell more than expected in October amid uncertainty ahead of the Budget.

Retail sales fell by 0.7% on the month following a 0.1% increase in September. Economists had been expecting a 0.3% decline.

September’s gain was revised down from 0.3%.

Non-food stores sales volumes fell by 1.4% in October following a 2.3% jump in September and the ONS said that retailers across a range of industries suggested that low consumer confidence and uncertainty around the Budget had affected sales.

Sales at clothing stores were particularly weak, dropping 3.1% on the month.

ONS senior statistician Hannah Finselbach said: "Retail sales fell back in October following three months of growth. The fall was driven by a notably poor month for clothing stores, but retailers across the board reported consumers held back on spending ahead of the Budget.

"However, when we look at the wider trend, retail sales are increasing across the three month and annual periods, although they remain below pre-pandemic levels."

Also on Friday, a long-running survey showed that consumer confidence jumped in November, after uncertainty seen in the run-up to the Budget eased.

The latest GfK consumer confidence index was -18 in November, a three-point jump on October, when it eased one point to -21.

It was also a notable improvement on the -24 recorded in November 2023.

Within the overall index score, all but one sub-measure strengthened. Expectations for personal finances over the coming 12 months rose one point to -1, while the economic outlook also improved, by two points to -26.

Consumers were also more willing to spend in the run up to Black Friday, with the major purchase index jumping five points to -16. In contrast, the savings index fell 3 points to 24.

Neil Bellamy, consumer insights director at GfK, said: "There was evidence of nervousness in recent months as consumers contemplated the potential worrying impact of the Budget at home, and even the implications of the US presidential election.

"But we have moved past these events now. The biggest change this month is in major purchase intentions, an important measure.

"However, while 2025 is just around the corner and the new year often brings optimism, it’s too early to expect significant further improvements in the consumer mood."

Bellamy pointed to inflation, which ticked higher in October to 2.3%, and ongoing cost of living pressures as potential headwinds.

In equity markets, Warhammer maker Games Workshop surged as it lifted half-year guidance after trading in the last two months exceeded expectations.

The company forecast pre-tax profit of at least £120m for the six months to 31 December, compared with £96.1m a year earlier. Core revenue was estimated at not less than £260m and licensing revenue of at least £30m.

JD Sports Fashion was a touch weaker, having tumbled on Thursday after it warned that full-year profits would be at the lower end of forecasts after a "volatile" trading environment in October due to bigger discounts, milder weather and consumer caution ahead of the US election.

In a research note on Friday, JPMorgan Cazenove downgraded its stance on the shares to ‘neutral’ from ‘overweight’ following the results.

It said that with a high level of earnings uncertainty and no clear catalyst to drive upside, the shares are likely to struggle to recover over the coming months.

Market Movers

FTSE 100 (UKX) 8,207.09 0.71%
FTSE 250 (MCX) 20,425.18 0.37%
techMARK (TASX) 4,652.25 0.42%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 4,500.00p 2.27%
Spirax Group (SPX) 6,645.00p 2.07%
Melrose Industries (MRO) 517.00p 1.73%
Sainsbury (J) (SBRY) 251.00p 1.70%
Smith (DS) (SMDS) 592.00p 1.54%
Rentokil Initial (RTO) 402.80p 1.46%
Persimmon (PSN) 1,259.50p 1.45%
Ashtead Group (AHT) 6,270.00p 1.42%
Mondi (MNDI) 1,184.50p 1.41%
Informa (INF) 866.40p 1.33%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 95.04p -0.42%
CRH (CDI) (CRH) 7,976.00p -0.37%
International Consolidated Airlines Group SA (CDI) (IAG) 246.10p -0.12%
Rolls-Royce Holdings (RR.) 540.20p -0.11%
Hiscox Limited (DI) (HSX) 1,035.00p -0.10%
BAE Systems (BA.) 1,324.50p -0.04%
Frasers Group (FRAS) 732.50p 0.00%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
Pershing Square Holdings Ltd NPV (PSH) 3,612.00p 0.17%
Bunzl (BNZL) 3,474.00p 0.17%

FTSE 250 - Risers

Games Workshop Group (GAW) 13,090.00p 11.78%
Dr. Martens (DOCS) 56.10p 3.70%
Discoverie Group (DSCV) 657.00p 2.66%
Aston Martin Lagonda Global Holdings (AML) 105.30p 2.53%
PRS Reit (The) (PRSR) 106.00p 2.51%
Morgan Sindall Group (MGNS) 3,910.00p 2.49%
Vesuvius (VSVS) 407.00p 2.39%
Elementis (ELM) 137.20p 2.39%
Grafton Group Ut (CDI) (GFTU) 965.70p 2.33%
Burberry Group (BRBY) 897.00p 2.26%

FTSE 250 - Fallers

W.A.G Payment Solutions (WPS) 80.00p -5.88%
Wetherspoon (J.D.) (JDW) 598.00p -2.69%
AO World (AO.) 103.00p -2.65%
Paragon Banking Group (PAG) 714.00p -2.59%
Me Group International (MEGP) 210.00p -2.33%
Pets at Home Group (PETS) 272.00p -2.23%
Victrex plc (VCT) 844.00p -2.20%
Direct Line Insurance Group (DLG) 151.80p -2.19%
Edinburgh Worldwide Inv Trust (EWI) 168.00p -1.98%
Foresight Solar Fund Limited (FSFL) 79.20p -1.98%